BHEL Performance 2011-12 Global Compact Principles Human Rights

Principle 1): Business should support and respect the protection of internationally proclaimed human rights

BHEL policies are in line with the principles of Human Rights, The Constitution of India, the various Labour Laws, etc. BHEL has special provisions for ensuring safeguard of women employee at the workplace. Principles of Natural Justice are enshrined in The BHEL Conduct, Discipline and Appeal Rules which are applicable to employees and Standing Orders which are applicable to workers. Principle 2): Make sure they are not complicit in Human Rights abuse

No instance of Human Rights abuse has been reported in the Company. Labour Standards Principle 3): Businesses should uphold the freedom of association and the effective recognition of right to collective bargaining

The Government of India has enacted various labour laws to adequately protect the interests of the working class. These laws are strictly adhered to in BHEL. BHEL units/divisions are required to submit quarterly reports on compliances of different laws to the Board of Directors. This is done to ensure that the interests of the workers are protected. Apart from this, BHEL has various bi-partite fora for workers, where the issues / problems pertaining to the workers are discussed and settled. BHEL also has an apex level bipartite forum namely The Joint Committee wherein the elected representatives of all units of BHEL, along with the Central Trade Union Organizations, to which the Unions are affiliated, are represented from the workers side whereas the Management is represented by Chairman & Managing Director and Functional Directors along with the Heads of Units. As part of our efforts to take the participative culture to a higher pedestal, BHEL has been organizing Workshops related to various themes namely Productivity, Organizational Excellence etc. During these workshops employees are sensitized about the challenges being faced by the Company and on evolving strategies to meet the challenges and customer commitment. BHEL has organized four special sessions of Joint Committee in Workshop format during the years 2004, 2006, 2008 & 2011. Syndicate Groups were formed on various subject of topical interest both to workers as well as the Company like Strengthening of Participative Fora, percolation of discussions in the Joint Committee to Plant level, Multi-skilling, Redeployment, Effective Utilization of Critical Machines, Enhancing the Productive Time of Man and Page1of8

Machine, Reduction in Rejection and Rework, Maintenance and Upkeep of Machines, Three Shift Working, Enhancing Productivity of Employees, Dissemination of Company Information, Cost Cutting Measures at Workplace and Wastage Control, Improving Quality and bringing Quality Consciousness among employees, Reduction in Cycle Time, and Sequential Supplies from the Units. At the unit level, open forums and meetings of Plant Council & Shop council are held wherein issues related to Production in financial and physical terms, Productivity, Order Book, Cash Collection, Despatch, General Administration and Discipline etc. are discussed amongst the participants from all categories of employees. Suggestions on cost reduction, meeting the production targets, sequential deliveries and quality of goods are accepted which are evaluated for implementation. The involvement of all the cadres in the workshop has had a positive impact on the working in the unit. Principle 4): The Elimination of all forms of forced and compulsory labour

The Company neither subscribes to nor indulges in such coercive practices. Towards this, it never asks its employees to deposit their original documents pertaining to their education qualifications or Date of Birth. Principle 5): The Effective Abolition of Child Labour

As per BHELs Recruitment Policy, the minimum age for employment in the Company is 18 years. No person below this age can be employed in BHEL, thereby ensuring that child labour is not employed in BHEL. In fact, BHEL is Zero Tolerance company regarding employment of child labour. Principle 6): Eliminate discrimination in respect of employment and occupation

Uniform set of rules are mentioned in The Personnel Policy of BHEL, which apply equally to all employees, irrespective of factors such as sex, caste, religion, race etc. All recruitments are conducted in a transparent and impartial manner, giving equal opportunity to all eligible candidates, without any discrimination whatsoever. Environment

Principle 7): Businesses should support a precautionary approach to environmental challenges

The Company is committed to be an environment friendly company in all its areas of activities, products and services besides providing safe and healthy working environment. In line with this, BHEL undertakes a number of Environment Improvement Projects (EIPs) and Community Development Programmes. These projects helped in creating a pollution free environment, conservation of precious resources like energy, water, fuel oil coolant, lubricant besides installation of proper system for storage/handling of chemical wastes utilizing state of the art technologies. Some of the major EIPs executed in the recent past at BHEL manufacturing plants and Page2of8

townships included: Tree plantation drives, Installation of Rain Water Harvesting Systems, Conservation of natural resources, generation of energy from waste, efficient energy and water management Reduction in noise level, Improvement in chemical storage and handling systems etc.

BHEL has acquired certifications to Quality Management Systems (ISO 9001), Environmental Management Systems (ISO 14001) and Occupational Health & Safety Management Systems (OHSAS 18001) and is also well on its journey towards Total Quality Management. BHEL has adopted a Health, Safety and Environment (HSE) policy along with detailed guidelines under it. All units of BHEL strictly adhere to this policy. The HSE policy of BHEL is: BHEL is committed to being an environment friendly company in all its activities, products, and services and to provide safe and healthy working environment to all employees as an integral part of business performance through: Compliance with applicable Legislation and Regulations. Continual improvement in the Occupational Health, Safety and Environmental Management Systems Performance. Promotion of activities for conservation of resources by Environmental Management. Enhancement of Environmental, Safety and Occupational Health awareness amongst employees, customers and suppliers by proactive communication and training. Periodical review of Occupational Health, Safety & Environmental Management Systems to ensure its continuing suitability, adequacy and effectiveness. Communication of this HSE Policy to all employees and interested parties. Coordination with concerned Government agencies/ regulatory bodies engaged in Occupational Health, Safety & Environmental activities.

To support scientific research on the environmental issues involved, Pollution Control Research Institute (PCRI) at BHELs Haridwar plant was set up under United Nations Development Programme (UNDP) with an objective to evolve technologies and provide consultancy services in the area of industrial pollution with respect to air, water, noise and solid waste. PCRI is equipped with modern monitoring and analytical facilities and powered by a team of highly qualified engineers and scientists. The expertise available at PCRI is continually upgraded through association with renowned experts in the field, strengthening the capabilities of the institute. The activities of PCRI cover the following areas: Page3of8

Environmental Impact Assessment e.g. for Thermal Power Plants, Oil Exploratory Drilling sites and other large industries Sponsored Research & Development Projects of CPCB, MoEF Performance evaluation of Pollution Control Systems and recommendations for corrective measures Monitoring & Analysis of pollution levels in air, water, solid waste Training & Development of professionals engaged in environmental protection Establishment of Environmental and Chemical Labs for Thermal Power Plants Regional Environmental Studies Consultancy services

Principle 8): Undertake initiatives to promote greater environmental responsibilities

The company has enshrined the tenets of Sustainable Development in its core strategy. A Two tier (Corporate and Manufacturing Units) organization structure has been developed under Corporate HSE department of BHEL to establish, implement, monitor, measure, and improve the Environment performance towards the objective of driving Sustainable Development. The company has enunciated its Sustainable Development Policy in November 2011 and it strives for transparency and unbiased dialogue with the concerned stakeholders on the material issues. The SD Policy of BHEL is: We at BHEL offer products, systems and services designed to benefit the society. We are committed to undertaking practices that meet the economic, ecological and social responsibility tenets of Sustainable Development. We will work with all our stakeholders to ensure continuous improvement in the Sustainable Development of our operations within the ambit of the guidelines issued by Government of India. As part of its commitment towards the social environment and as a responsible corporate citizen, BHEL is involved in a host of community development programmes in various parts of the country. In conformity with CSR Guidelines issued by Department of Public Enterprises in April 2010, BHEL has adopted its CSR Policy from 2010-11 onwards. Fostering the tradition of repaying the society at large by actively participating in the welfare of local communities through numerous Corporate Social Responsibility initiatives, BHEL undertakes socioeconomic and community development programmes to promote education, improvement of living conditions and hygiene in villages and communities located in the vicinity of its manufacturing plants and project sites spread across the country. In addition, BHEL undertakes CSR initiatives for implementation through various NGOs/Trusts/ Social Welfare Societies engaged in social activities throughout the country in following eight priority areas: 1. 2. 3. 4. 5. 6. 7. Environment Protection & Energy Conservation Adoption of ITIs and setting-up Skill Development Institutes Vocational Training Education and promotion of talents Adoption of villages and Community Development Disaster/ Calamity Management Health Management Page4of8

8. Infrastructural Development The Memorandum of Understanding (MoU) 2012-13 of BHEL with Department of Heavy industry, Ministry of Heavy Industry and Public Enterprises includes thrust areas on Sustainable Development and CSR relating to Environmental Protection, Energy Conservation, Renewable Energy use, Water harvesting and enhancing Green Coverage.

Principle 9): Encourage the development and diffusion of environment friendly technologies
BHELs products, including clean technologies are regularly monitored against those of other leading similar equipment manufacturers and relevant international standards. Gaps, if any, are identified and developmental projects are undertaken to bridge them. BHEL has been actively developing and acquiring clean technologies for power generation over past three decades. BHEL had initiated a coal research programme in the late seventies to develop technologies to efficiently utilize Indian Coal while minimizing the associated environmental impacts. These technologies enable BHELs customers to minimize the impact of power generation on the environment. Some of them are mentioned below:

Integrated Gasification Combined Cycle (IGCC) BHEL is one of the few

companies worldwide, involved in the development of Integrated Gasification Combined Cycle (IGCC) technology which would usher in clean coal technology. An IGCC power plant combines the benefits of two highly efficient and environmentally clean processes: coal gasification and gas turbine based combined cycle. The integration of these technologies yields high efficiency of the combined cycle design with low cost coal as fuel. Gasification also inherently reduces emission of SOx. Further as the coal gas is cleaned before being fired in the gas turbine, particulate pollutants in the exhaust gases are negligible.

Supercritical Thermal power Plant A Supercritical thermal power plant

has higher efficiency compared to the conventional sub-critical cycle, thus offering the advantage of burning lesser fuel for the same output and with low emissions. BHEL is executing orders for 660, 700 and 800 MW supercritical steam generators and turbo generators.

Technology, BHEL, in association with Indira Gandhi Center for Atomic Research (IGCAR), NTPC and other organizations is developing Advanced Ultra Supercritical plants. Once operational, such plants will operate at efficiency exceeding 45% under Indian ambient conditions.

Advanced Ultra Supercritical (Adv-USC) Thermal Power Plant Technology - Under the aegis of the National Mission on Clean Coal

Advanced Class Gas Turbines - BHEL is the only Indian company capable

of manufacturing large size gas based power plant equipment, comprising of advanced-class gas turbines up to 289 MW (ISO) rating for open and combinedPage5of8

cycle operations. The efficiency of an Advanced Class GT in the combined cycle mode is in the range of 56 - 57% under Indian conditions. Natural gas as fuel used in the gas turbine based combined cycle plants is the cleanest among the fossil fuels and produces the minimum pollution and carbon dioxide emission.

Sub-critical Thermal Power Plants with Enhanced Efficiency - BHEL has been continually making efforts to improve the efficiency of thermal power plants. A new variant of 500 MW steam turbine has been introduced by BHEL wherein thermal performance of the cycle is about 0.6% better than that of the conventional cycle. A new cost effective and thermodynamically efficient plant with a unit rating of 600 MW has also been developed. Hydro Power Plants - BHEL is a leading manufacturer and supplier of hydro power plant equipment, including hydro turbines and hydro-generators. These are comparable to the best in the world in terms of operating efficiencies. The product portfolio of BHEL includes custom built hydro turbines of Kaplan, Francis and Pelton types with matching generators, pump turbines with matching motor-generators up to 300 MW.

Reduction of NOx and SOx Emissions - Emissions of oxides from thermal power plants of Nitrogen and Sulphur are collectively called NOx and SOx, and are a health hazard. BHEL has developed in-house several technologies for reduction of emissions from thermal power plants. Low NOx oil fired burners have also been developed. In addition, BHEL has developed a Selective Catalytic Reduction (SCR) system which can remove NOx from the flue gas.
BHEL has also developed a dynamic classifier system which improves classification efficiency of the pulveriser and provides better particle size control enabling availability of uniform coal size to the burners leading to improvements of combustion efficiency of boiler and reduction in NOx emission from the boiler. The new dynamic classifier system has been commissioned at Dr. Narla Tata Rao Thermal Power Plant, Vijayawada. Flue Gas Desulphurisation (FGD) systems remove Sulphur Dioxide from the flue gas. BHEL has supplied an FGD system for 250 MW Trombay thermal power plants in association with Mitsubishi Heavy Industries, Japan. Circulating Fluidised Bed Combustion (CFBC) power plants, which are suitable for high Sulphur content lignite, are also part of BHEL's product range.

Electrostatic Precipitators (ESPs) - BHEL is the leading manufacturer and supplier of ESPs in the country used for removing fly ash from the flue gas (efficiencies up to 99.97%) for utility and industrial applications including Bio mass fired boilers, cement plants, steel plants, soda recovery boilers etc. Solar Photovoltaics (SPV) - BHEL is one of the leading manufacturer and
supplier of silicon solar cells in India. For this, the Company has manufacturing facilities for solar photovoltaic cells modules at its Bangalore Unit with a capacity of 8 MW per annum and capacity augmentation up to 26 MW is under progress. There is also an R&D facility, Amorphous Silicon Solar Cell Plant Page6of8

(ASSCP), located at Gurgaon. BHEL's solar modules have been contributing to the national effort for development of far-flung / remote areas. BHEL has supplied and commissioned large size stand-alone as well as grid interactive Solar Power Plants in a number of major cities and remote areas of the country. With an aim to perform a significant role in National Solar Missions proposed target of 20,000 MW of grid connected solar power, BHEL signed an agreement with Abengoa, Spain, a leader in solar projects to provide EPC solutions in Concentrated Solar Thermal Power (CSP) areas. BHEL is working with Bharat Electronics Limited to set-up a manufacturing plant of approx. 240 MW solar PV Products and systems.

Fuel Cells - Hydrogen energy promises to the cleanest form of energy in future. BHEL has been carrying out R&D on fuel cells for over two decades.
ANTI-CORRUPTION

Principle 10): Businesses should work against all forms of corruption, including extortion and bribery BHEL is committed to enhancing transparency in all its business dealings for which it has a Vigilance set-up in place to prevent any irregularities. Main objective of the company is to curb corruption by focusing more on the preventive and educative aspects, rather than investigative /punitive. Training programmes, seminars/conferences and interaction of Chief Vigilance Officer with the employees is a regular feature in the Company. With a view to bring in transparency, Government of India has enacted "Right to Information Act" giving right to all citizens of India to seek information besides other rights. BHEL has taken a lead role in implementing all provisions of the act in letter and spirit. The organization has signed 'Integrity Pact' with Transparency International. The intention is to make public procurement and contracting more transparent by binding both the parties to ethical conduct. This would enable a monitoring role for civil society - the ultimate beneficiary. In order to prevent corruption, a host of 'transparency measures' have been initiated Company wide, by leveraging technology. Some of them are: Status of Purchase Orders, Works Contracts concluded every month, as per CVC format, is being uploaded by all Units. Procedure and forms related to Vendor registration are hosted on the Company web site. Page7of8

Status of vendor registration applications is hosted on the web and can be viewed by vendors. E-payment of vendor bills is being implemented throughout the organization and principle of first in first out is being followed as a rule in payment of vendor bills. Status of bill payment can be viewed by the vendors on-line. Indents are being raised on-line in most of the Units. The performance reports of all executives are handled on-line through MAP (Moving Ahead through Performance). Information relating to Rules/Procedures governing the issue of license, permissions, clearances etc., is available on the BHEL/Units websites.

As part of BHELs endeavor to set a high standard of conduct for its employees, a Code of Business Conduct and Ethics has been laid down for all Board Members and Senior Management personnel. The code encompasses General Moral Imperative, Specific Professional Responsibilities and Additional duties / imperatives for Board Members and Senior Management Personnel.

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